Dividend Growth Stock Overview: Eaton Vance Corporation

Photo courtesy GotCredit.com.

About Eaton Vance Corporation

Eaton Vance Corporation, headquartered in Boston, Massachusetts, is an international money manager with nearly $300 billion in assets under management. The company dates back to the founding of asset management company Eaton & Howard in 1924. In 1979, asset management company Vance, Sanders & Company acquired Eaton & Howard and in 1990 the combined company changed its name to Eaton Vance Management.

Eaton Vance initially focused on open-end mutual funds and investment advisory services to high-net-worth clients. Over the last 25 years, the company has expanded to include a wide array of products and services including closed-end and private funds, and retail managed accounts. The top three investment products that contribute to Eaton Vance assets are institutional accounts (36% of total assets), open-end funds (28%) and retail managed accounts (12%). Eaton Vance provides products and services across all asset types.

The company markets its products in the United States through a variety of distribution channels including registered investment advisors, banks, and national and regional broker-dealers. A 3rd party distributor represents Eaton Vance in the Middle East and throughout the rest of the world the company uses sales representatives to market its investment products.

For the fiscal year ending on October 31, 2014, Eaton Vance’s total revenue was up 6.8% to $1.45 billion and adjusted net income was up 57% to $304.3 million. Earnings per share were up nearly 60% to $2.48. Eaton Vance also recorded its 19th year of positive net flows. Net assets under management were up 6.1% to nearly $300 billion. Of the increase, $14.4 billion was due to appreciation and the remaining $2.8 billion was from net inflows into Eaton Vance investment vehicles.

The company is a member of the S&P Mid Cap 400 index and S&P’s High Yield Dividend Aristocrats index, and trades under the ticker symbol EV.

Eaton Vance’s Dividend and Stock Split History

Eaton Vance Dividend Growth

Dividend growth has slowed recently at Eaton Vance, but the 5-year compounded dividend growth rate is still nearly 8%.

Eaton Vance has increased its dividend payout year-over-year since 1981. For the last two decades, Eaton Vance has increased the dividend in the 4th quarter, announcing the increase in mid-October about two weeks ahead of the ex-dividend date at the end of October. In October 2014, Eaton Vance announced a 13.6% increase in the dividend, to an annualized rate of $1.00 a share. I expect Eaton Vance to announce their next dividend increase in October 2015.

After rapidly increasing the payout for at least a decade and a half, Eaton Vance’s dividend growth has slowed since 2009. From 1991 to 2008 – with one exception, the company increased dividends by at least 12% a year and in most cases, much more. (There were several years of 25%+ dividend growth.) In the 6 years since then, the company has had only 2 years of double-digit percentage dividend growth. This results in Eaton Vance having a 5-year compounded annual dividend growth rate (CADGR) of 7.80%, but 10-year and 20-year CADGRs of 12.71% and 17.48%, respectively.

Since beginning its record of annual dividend increases, Eaton Vance Corporation has split its stock 2-for-1 five times. The first split occurred in December 1992 and subsequent splits occurred in May 1997, September 1998, November 2000, and most recently in January 2005. A single share of stock purchased prior to December 1992 would have split into 32 shares.

Over the 5 years ending on December 31, 2014, Eaton Vance stock appreciated at an annualized rate of 9.44%, from a split-adjusted $25.76 to $40.44. This underperformed both the 13.0% annualized return of the S&P 500 and the 14.9% annualized return of the S&P Mid Cap 400 index during this time.

Eaton Vance’s Direct Purchase and Dividend Reinvestment Plans

Eaton Vance does not have a direct purchase or dividend reinvestment plan. In order to invest in Eaton Vance stock, you’ll need to purchase it through a broker. Most brokers will allow you to reinvest dividends without any fee. Ask your broker for more information on how to set this up if you are interested.

Helpful Links

Eaton Vance’s Investor Relations Website

Current quote and financial summary for Eaton Vance Corporation (finviz.com)

 

Share this post:

Recent Posts

Comments are closed.